I often hear people asking “What is the best endowment plan?” in forums. In a short answer let me say there is no such thing as the best endowment plan. Endowment like any other kind of investment instruments does not guarantee its future performance. An endowment plan that yield good return in the past may not yield the same return in the future.
What is an endowment policy? It is basically a saving plan bundled with insurance protection. Before getting an endowment policy, ask yourself what is the purpose of getting one? If your objective is to save up a certain some of funds for usage after twenty years, then I recommend you to get a pure saving plan. If your objective is to have an insurance coverage, then get a pure insurance plan. Mixing your objectives with this kind of combo plan does not equate a good plan. Let me give a few disadvantages of owning an endowment policy.
- You will incur high distribution costs which include commission fees to agent during first few years of policy
- Since a major portion of your premium goes into saving and a small portion goes into insurance, your sum assured is always pathetically low
- As endowment policy is a long term plan, early termination will result in losses. That means you may not get back all your premiums paid depending on the year of surrender. In other words, your savings is locked for a number of years
- An endowment policy always projected a high return per annum which is not guaranteed. The actual return is most of the time less than projection
Now the question is, “Is there an alternative solution to an endowment plan?” The answer is definitely a YES. However this method involves a little bit of do-it-yourself approach. Let me discuss your saving and insurance portion separately.
The money paid for the saving portion of an endowment is actually invested in bonds and equities by the insurance company. That is how the insurance company is able to generate returns for your savings. There is no secret about that. So why not invest the money yourself into bonds and equities? Depending on your risk appetite and investment horizon, you can set up a diversified portfolio consisting of global equities and bonds fund. I shall not dwell into bonds and equities as it requires a separate topic.
However for the less savvy individuals, I would recommend setting up a regular savings plan with a balanced fund. Visit Fundsupermart Funds Selector and select Balanced under main categories, you will see a whole list of available funds. I would recommend any of the following balanced funds:
DWS Premier Select Trust
First Sate Bridge
UOB GrowthPath series
As for your insurance portion, you might want to set aside a small sum of money into a term insurance. Depending on your age group and length of coverage, you can get a $100,000 insurance protection for less than $20. I would recommend you check out the following term insurance:
Aviva SAF Group Term
Source: STI Stock Info
Closing date of application: 15 April 2008
Commencement of trading: 17 April 2008
Established in 1998, China Eratat Sports is engaged in the design, manufacture, and sale of sports fashion footwear and apparel under their own Eratat brand.
- Their products are sold across 21 provinces / cities at 1,393 retail locations through their PRC distributors.
- They distinguish themselves from their competitors by developing their products based on the concept of "Life - Sports".
- International Artiste Wang Lee Hom has been their brand ambassador since 2002.
- They are well received and widely recognised in the PRC market since 1998, even having received the "2006 China Best Public Image Brand".
- They have strong product development capabilities, being able to generate approx. 3,000 and 1,000 design specification types for their footwear and apparel products range per annum respectively.
- To increase their production lines in their new factory premises to achieve 11.5m pairs of footwear and 6.2m apparel units per annum.
- To strengthen their brand image and recognition by advertising aggressively on TV and print, use of brand ambassadors, especially for the run-up and during the Beijing Olympics.
Intended IPO price: $0.30
No. of shares available for public offer: 8m
No. of shares available for placement offer: 155m
Total post invitation share capital: Approx. 414.9m
Based on its numbers, China Eratat is a smaller company as compared to its SGX-listed peers of China Hongxing and China Sports, whose net profits were approx. S$60m and S$30m respectively. As such, they trade at a higher 25x and 18x historical PEs respectively.
China Eratat Sports should trade at a Fair Value of $0.40 or a discounted 14x PE only. Probability of getting allotted for the IPO - FAIR
Click here for prospectus here.
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Source: Extraordinary Profits
Gold is trading much weaker in New York Tuesday morning, as the precious metals complex is caught up in another major fund liquidation involving virtually all commodities.
Gold opened with major losses on the Comex, after plunging to $897/oz at the London AM Fix, and at 10:13 am the nearby June contract was trading at $892.20/oz, down $29.30 from Monday's settlement price. After opening at $903/oz, gold was quickly sold down to a low of $888.50/oz, but it has managed to recover.
Where is gold price heading to from here?
If you have gold futures position, you may be panic, and eager to sell off all your gold positions just in case gold price goes lower. But if you has done so, you might be selling at the low, and you will regret very soon.
As a trader, it is not rare for market to go against you, actually it happens me a lot of time, and I still exit from the trade with a profit. When market goes against you, don't panic, use all the brain power in your head to analyse the situation, and execute the next step (buy more, cut loss or do nothing).
In my view, the two main drivers for rising gold are Falling USD and Rising crude oil price
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Source: Metal Trading
Singapore: Singapore market declined following a two day rally. Due to a lack of fresh buying leads, investors chose to lock in profits and wait at the sideline. This is despite the unexpected 10% increase in February factory output. Cues are still heavily dependent on US economic data. FTSE-STI down 4.97 or 0.2% to close at 2,995.22 points. Trading volume was 1.47 billion shares valued at S$1.57 billion and losers outnumbered gainers 370 to 253. Commodities supplier Olam International Ltd suffered a 14.1% lost to S$1.95 after its rating was cut to “sell” from “neutral” by Merrill Lynch.
Wall Street: US market retreated after pessimistic numbers on February’s durable goods orders. The Commerce Department released a 1.7% dip in last month’s order for durable goods, which is indicative on business spending and consumer demand. This is its second consecutive shrink. Adding to worries, the Commerce Department also announced that sales of new homes slumped 1.8% in February, which dragged down sales for the fourth straight month to a 13-year low. Dow Jones slipped 109.74 or
0.9% to 12,422.86 points and Nasdaq dropped 16.69 or 0.7% to close at 2,324.36 points. However, crude oil soared US$4.58 to close at US$105.80 per barrel on NYMEX.
Outlook: The mini-rally that started on Monday and moved the benchmark STI to the 3,000 level is likely to end earlier than our expectation. We have expected the market to rally towards the end of the week on expectation of better Singapore manufacturing number. True, the index for industrial productions has registered another month of double-digit growth, by 10% in February 2008 after growing 12.8% in January (see Chart). However, investors chose to remain at the sidelines pending further development in the US. Thus, the worst-than-expected US durable orders are likely to lead to some profit taking today. The US economy is probably in a recession now. However, the Singapore economy is expected to remain healthy, shown by the latest manufacturing numbers. With the backing of the Singapore economy, buy on weakness will still be the preferred investment strategy.
Home Sales News
New home sales slump to 9-month low in Feb. The number of new homes sold by developers dropped to just 170 units in February - the lowest since the Urban Redevelopment Authority (URA) began releasing monthly sales data in June 2007. And CB Richard Ellis executive director Li Hiaw Ho estimates that new home sales could be just 700-800 units for the first quarter of 2008 - even lower than the 894 units sold in the fourth quarter during the Asian financial crisis in 1997. In an analysis of the data released yesterday, Jones Lang LaSalle (JLL) said, however, that prices were comparatively stable. The firm's head of research (South-east Asia) Chua Yang Liang said that using the 'lowest median prices' category of the URA data, median prices declined 0.7% for units sold in the Core Central Region (CCR) and 5% in the Outside Central Region (OCR) on a month-on-month basis. For units sold in the Rest of Central Region (RCR), the lowest median price increased 14.2% from $765 psf in January to $874 psf in February.
Swiber Holdings announced on Sunday night that it was awarded a LOI from CUEL Thailand for offshore installation work (platforms, jackets, topsides and pipelines) in the Gulf of Thai. The contract is tenable for five years and estimated to be worth US$50 p.a. The contract is scheduled to start in 1Q09.
Swiber has shown impressive YTD win of US$742m boosting order book to about US$1bn. This is the first long-term contract that Swiber wins after Brunei Shell project of about US$200m which will end in 2009. We believe more of such long-term contracts will provide a good mix for Swiber's order book and confidence in earnings visibility. Our FY08 revenue forecasts for FY08 is 90% backed by orders while FY09 is
already 45% secured.
Source: DBS Vickers